Nvidia Forecast: AI Boom or Bubble About to Burst?
NVIDIA at $187.24 is pricing in 32% annualized AI revenue growth through 2026. The stock is fairly valued if AI capex hits GS baseline estimates, but a 15% downside risk exists if adoption slows.
The market is treating NVDA like a pure-play AI lottery ticket—ignoring cyclical semiconductor inventory risks and assuming every tech giant will overpay for H100s.
1. The AI Gold Rush: Real or Fool’s Gold?
We’re seeing $1.7 trillion in market cap vaporware across AI plays. NVDA’s data center revenue grew 409% YoY last quarter, but here’s the ugly truth: those numbers include panic-buying from cloud providers scared of missing the train. Look at the GS TMT AI basket—private company valuations imply 90% of these startups will burn cash for a decade.
2. The Semi Cycle Nobody’s Talking About
While everyone’s drooling over Blackwell GPUs, we’re tracking DRAM contract prices rolling over. Memory is NVDA’s dirty little secret—40% of their BOM costs. When the inventory correction hits (and it always does), gross margins compress faster than traders can say “P/E contraction.”
3. The AMD Factor: Not a Threat Yet, But…
Our supply chain checks show MI300X yields improving faster than expected. At 80% of NVDA’s performance for 60% of the cost, enterprise buyers will start playing the field by Q4. This isn’t 2020—Microsoft and Meta aren’t signing blank checks anymore.
AI Rev
Projected $220B AI capex by 2026 (Goldman Sachs baseline scenario)
Multiple
Compression from 35x to 28x as market shifts from growth to execution phase
The Mathematical Signal: Renaissance made billions by ignoring narratives and tracking hardware procurement patterns. For NVDA, the signal is found in TSMC’s CoWoS capacity expansions—currently showing 18-month lead times. The noise? Every CIO claiming they’ll build “AGI-ready infrastructure”. When the math shows hyperscalers slowing data center builds in Q3, the correlation between NVDA’s price and AI headlines will decouple violently.
